Glaxo investors fear the worst

>SHAREHOLDERS in pharmaceuticals giant Glaxo may be tempted to reach for the happy pills when the group reports quarterly figures tomorrow.

Analysts are forecasting a 20% fall in earnings per share in the second quarter and a 5% slide in sales to just over £5bn.

The company is being hit by a double whammy of competition from generic drugs and the weak dollar.

The greenback is expected to knock 7% to 8% off the sales line when translated into sterling.

Glaxo will also take a £170m hit to cover previously announced legal charges.

The company has made no secret that the first three quarters of this year would be tough, but is sticking by its belief that its full-year earnings will be around the same level as in 2003.

Chief executive Jean-Pierre Garnier has already warned the market over competition from generic copies of antidepressants Paxil and Wellbutrin and of the impact of the fragile dollar.

Glaxo's woes contrast with rivals Novartis, Roche and AstraZeneca, which surprised the markets with buoyant figures.

Investors will also be seeking an update on the company's large - but untested - pipeline of new drugs. Important clinical trial results for a number of experimental products are due in the second half of the year.